Samsung Electronics said Friday it anticipates a massive surge in operating profits in the first quarter, more than tenfold year-over-year or up by over 900% as chip prices rebound.
By far the largest of family-controlled conglomerates that dominate business in Asia’s fourth-largest economy, the firm is the flagship subsidiary of South Korean giant Samsung Group.
The tech giant said in a regulatory filing that January-March operating profits were expected to rise 931.3% to 6.6 trillion won ($4.89 billion). Operating profits in the same period last year totaled around 640 billion won.
The expectation exceeded the average estimate by 20.5%, according to South Korea’s Yonhap news agency, which referenced its financial data firm.
Sales, meanwhile, are expected to rise 11.4% to 71 trillion won, Samsung said.
South Korean chipmakers, led by Samsung, enjoyed record profits in recent years as prices for their products soared, but a global economic slowdown dealt a blow to memory chip sales.
However, according to industry monitor World Semiconductor Trade Statistics, the semiconductor market had been predicted to recover this year and grow 11.8%.
The news from Samsung comes after South Korea’s SK Hynix – the world’s second-largest memory chipmaker – announced in January that it had returned to profit after four consecutive quarters of losses.
Samsung’s overall outlook is “fortified by a resurgence in the smartphone market, escalating DRAM (memory chip) prices,” Neil Shah, vice president of Counterpoint Research, told Agence France-Presse (AFP).
Samsung is expected to release its final earnings report at the end of this month.
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